Critics say the government's unwillingness to take politically unpopular actions, such as raising water rates and enforcing strict conservation, has made a bad situation worse.

The blackouts also caused some economists to revisit their forecasts; the chief economist at Banco Votorantim in São Paulo projects Brazil’s economy to grow just 0.1% this year, with even that figure too optimistic if electricity rationing occurs.

Cia. Energetica de Minas Gerais (CIG-12.2%) and shares of other Brazilian utilities are under pressure on expectations for Brazil's regulator to curb electricity rate increases Cemig had planned to put in place in April. Shares also were downgraded yesterday at Standpoint Research. Also: ELP-3.7%, CPL-3.4%, EBR-2.4%.

Shares of Brazilian electric utilities plunge a day after the country announced a major cut in electricity taxes that will lower energy costs for industries and consumers. UBS says the “stock-price declines on regulatory noise seem exaggerated,” presenting buying opportunities. CIG-20.8%, ELP-8.9%, EBR-7.9%, CPL-3.7%.